Exclusive: McConnell frets about healthcare, hopeful on tax overhaul

WASHINGTON (Reuters) - U.S. Senate Majority Leader Mitch McConnell said on Wednesday he does not yet know how Republicans will amass the votes needed to pass legislation now being crafted to dismantle Obamacare, but expressed some optimism on another top priority, overhauling the tax code.

In an exclusive interview with Reuters, McConnell said healthcare and taxes still top the Republican legislative agenda, and he added that he will not reach out to the minority Democrats on either one because differences between the two parties are too stark.

McConnell also said he has not asked the White House for input as the Senate devises its own healthcare legislation after the Republican-led House of Representatives passed its version on May 4, but may do so in the future.

Excluding Democratic involvement will leave McConnell, a conservative 75-year-old Kentuckian with a reputation as a dealmaker, a narrow path to win passage of these ambitious goals, which are also at the head of Republican President Donald Trump's policy agenda. A repeal of Obamacare was one of Trump's leading campaign promises last year.

Asked about behind-the-scenes work among Senate Republicans on hammering out the provisions of a healthcare bill, McConnell said, "I don't know how we get to 50 (votes) at the moment. But that's the goal. And exactly what the composition of that (bill) is I'm not going to speculate about because it serves no purpose," McConnell said.

Republicans hold a 52-48 Senate majority. In the event of a 50-50 tie, Republican Vice President Mike Pence would be called upon to cast a tie-breaking vote.

McConnell opened the interview by saying, "There's not a whole lot of news to be made on healthcare." He declined to discuss what provisions he might want to see in the bill or provide a timetable for producing even a draft to show to rank-and-file Republican senators and gauge their support.

On the other hand, he said, prospects for passage of major tax legislation were "pretty good." While this too will be difficult, McConnell said, it is "not in my view quite as challenging as healthcare."

Trump and his fellow Republicans in Congress want to cut tax rates across the board, but a House proposal to use the tax code to boost exports and discourage imports has split the business community and some lawmakers.

The House narrowly passed its legislation to overhaul the healthcare system and dismantle major parts of the Obamacare law, formally called the Affordable Care Act, that was Democratic former President Barack Obama's signature legislative achievement, overcoming unified opposition from Democrats.

On Wednesday, the non-partisan Congressional Budget Office estimated the House-passed bill would result in 23 million people losing health insurance coverage by 2026, a sobering figure for Senate Republicans as they mull action. The CBO also said federal budget deficits would fall by $119 billion over 10 years under that bill.

Asked if he was getting any guidance from the White House on healthcare legislation, McConnell said, "Honestly I haven't asked for any. I told the president there would be a point at which we might well want him and the vice president to be helpful."

McConnell said Trump and Pence could play an important role when it comes to "whipping" up support for whatever bill is produced.

If the Senate passes a healthcare bill, lawmakers would have to work out the differences in the House and Senate versions and pass a compromise bill before it could go to Trump for his signature.

BALANCING ACT

With Republicans holding a slim Senate majority, McConnell likely needs the cooperation and support of hard-line conservative Republicans such as Senator Ted Cruz who in the past have been difficult to corral.

Cruz is a member of a working group within the Senate in charge of crafting the Senate Obamacare repeal legislation.

"I'm grateful that he wants to help us get an outcome here," McConnell said.

Republicans face a tricky balancing act. Because they cannot expect any Democratic support and have a razor-thin majority, they must devise legislation that appeals not only to the most conservative senators but also does not drive off many Republican moderates.

Since it became law in 2010, Republicans have railed against Obamacare, arguing that it is too expensive and involves the government too deeply in Americans' healthcare decisions.

They have said they want to replace it with a program that repeals most Obamacare taxes, reduces federal spending in the Medicaid insurance program for the poor and leaves more decisions up to the states.

McConnell in the past has promised to undo Obamacare "root and branch." Now that Republicans are in a position to do so with control of both Congress and the White House, they have struggled to come up with a consensus plan.

The Republican leader compared the effort to solving a Rubik's Cube.

Many Senate Republicans have misgivings about the House-passed legislation, which Democrats have said would deprive millions of people of insurance, benefit the wealthy and roll back Obamacare protections such as guaranteed coverage for people with pre-existing conditions.

McConnell made clear that senators are writing their own bill, saying, "We're working on a separate approach."

In taking a Republican-only approach to healthcare and taxes, McConnell said of Democrats, "They're not interested in doing what we're interested in doing."

McConnell expressed optimism two parties can band together to pass legislation funding the federal government in the fiscal year starting on Oct. 1.

He also noted good prospects for bipartisanship on a bill to expand sanctions against Iran, due for debate in the Senate Foreign Relations Committee this week, and renewal of a Food and Drug Administration user-fee program that expires later this year.

(Reporting by Susan Cornwell and Yasmeen Abutaleb; Writing by Richard Cowan; Editing by Kevin Drawbaugh, Will Dunham and Lisa Shumaker)